Apple Inc. has confirmed its plans to buy Intel Corp.’s modem business for a reported US$1 billion.
It’s a major move for Apple, which has been trying to sever its reliance on Qualcomm, its current provider for mobile modems, for nearly a decade.
Apple’s senior vice-president of hardware technologies, Johny Srouji, confirmed the news July 25, and said the acquisition will “help expedite our development on future products and allow Apple to further differentiate moving forward.”
Dimitri Mavrakis, the research director at tech market advisory firm ABI Research, said this will help Apple to differentiate itself from all the other companies scrambling to find their footing in the world of 5G.
“Apple’s acquisition of Intel’s 5G modem business will not only allow the iPhone manufacturer to gain world-class expertise in cellular modems, which is one of the most challenging areas in R&D, but also allow it to strike better deals with other major 5G patent holders. Apple will also potentially be able to negotiate better terms with its current 5G suppliers as well as integrate parts of the 5G modem into its existing processors,” Mavrakis wrote in a statement. “It is important to note that by inheriting some of the key 5G patents developed by Intel, Apple will be able to differentiate its 5G offering in what will soon be a very highly competitive 5G landscape.”
This acquisition does not mean that Intel is getting out of the modem business completely. The company has stated it will remain committed to developing modems for computers, IoT devices, and self-driving cars.
“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel’s chief executive officer, Bob Swan.
According to the press release, Apple will absorb about 2,200 employees from Intel.
The deal is expected to close in Q4 of 2019, if approved by regulators.
